Whichever side of the line you stand on in the global warming debate, I think we would all accept that air pollution is a problem.

Health issues

Just over three-quarters of all Australians live in 17 major cities with populations over 100,000 (2006 Census) with the majority of urban Australians living in the fi ve  largest cities of Sydney, Melbourne, Brisbane, Perth and Adelaide.

According to the Federal Government’s fi gures, “motor vehicles are one of the major emitters of air pollutants in urban Australia, contributing more than 80% of the CO emissions, 60-70% of the NOx and up to 40% of the HCs. Light petrol vehicles are the major transport contributors to CO, HC and NOx emissions, with diesel vehicles making a disproportionate contribution to NOx emissions. For example, in the Sydney air-shed, diesel vehicles make up only 8% of the fl eet, but are
responsible for an estimated 22% of NOx emissions from transport” (Draft RIS - Euro 5/6 Emission Standards for Light Vehicles page 7).

The consequences of such emissions on public health should not be underestimated. The Bureau of Transport and Regional Economics estimated “that in the year 2000 motor vehicle-related ambient air pollution accounted for between 900 and 4,500 morbidity cases – cardiovascular and respiratory diseases and bronchitis – and  between 900 and 2,000 early deaths” (Working Paper 63 Health Impacts of Transport Emissions in Australia: Economic Costs, p. ix).

“The economic cost of this premature mortality was between $1.1 billion and $2.6 billion (central estimate $1.8 billion). In addition, the estimated economic cost of morbidity was between $0.4 billion to $1.2 billion (central estimate $0.8 billion)” (Working Paper 63 Health Impacts of Transport Emissions in Australia: Economic Costs, p. xiii).

AfMA recognises that the negative effects on health from vehicle emissions will continue to rise as the number of vehicles on our roads increases. For this reason alone the early adoption of mitigation and reduction strategies for poor urban air quality should be an imperative for fl eet managers and, more importantly, for government.

The road to change

Although the impact of vehicle emissions has been well researched and understood, identifying the best approach in addressing this issue presents challenges for the fl eet manager.

Why should this be you might ask? The solution should be simple. Move to alternate vehicles with zero emissions. Well the reality is that there are no vehicles that are emissions free.

We have heard much about Electric Vehicles (EVs) and there is a concerted push for the acceptance of this technology as a silver bullet that will make major inroads in vehicle emission reductions. It isn’t hard on face value to see a benefi t in EVs as they have zero tailpipe emissions. But as with the adoption of any new technology, there must be a comprehensive cost/benefi t analysis and discussion on whether it will fi ll the brief for which it was designed. To ensure a positive outcome to the bottom-line there must be a positive answer to the following questions:

1. Will what is being proposed provide a real reduction in emissions?
2. Will EVs deliver a fi nancial benefi t in absolute dollar terms and/or value for money?
3. Do current technologies and fuels have the capability to get us where we want to be?
4. How easily will the adoption of the new technology be, and more importantly what additional new systems are needed for it to be a workable alternative?
5. What needs to be done to the existing infrastructure, such as electricity generation/distribution systems, to enable what is being proposed?

In answering some of these questions we need to look at what is available in the current market compared with what is being proposed. We are currently seeing small/medium conventionally fuelled vehicles returning 4.5 litres per 100 kilometres. This level of fuel use is less than that required by some current hybrid models. This reduced fuel consumption in conventional vehicels is being driven by a collective effort to lower average CO2 emissions. Authorities in different regions around the world are setting mandatory average emission targets for automotive manufacturers (see table 1). Questions one and two are the most relevant to the fl eet manager and their acceptance of EVs. So will the adoption of electric vehicles provide a valid reduction in emissions?

Suggested voluntary scheme.

Phase in starting in 2013 for 65% of new passenger vehicle production and to be completed by 2015.

Proposed target for Light Commercial Vehicles up to 3.5ton gross mass. Phase in starting from 2014 with 70% of vehicles and to be complete by 2017.

The EU has set a long term target of 147 has been set but is subject to review in 2013. Data has been compiled from several media sources.

With the introduction of the all-electric vehicle the Association sees a blurring of the conventional boundaries used in defining fuel consumption per kilometre travelled. Traditionally the fuel used in providing the motive power, usually hydrocarbon based, is included in this calculation; the availability of hybrids and EVs has challenged
this convention.

The Federal Government has classed the all-electric vehicle as a zero emission vehicle. The proposition attributed to the EV is that with this technology all emissions are eliminated.

It is important to bear in mind that any EV is only emission free if no emissions are produced in the electricity generation process that is used to provide the charge to the EV batteries. Where electricity is generated by burning coal, particularly brown coal, any advantage an EV might have over a petrol, diesel or LPG vehicle can quickly disappear.

In certain circumstances emissions directly linked to the provision of the EV motive power can produce signifi cantly more CO2 than some conventionally fuelledvehicles.

The challenge is determining from power station emissions what is the ecological footprint directly associated with the charging process for the lithium-ion (Li-ion) battery. Researchers from the Swiss organisation ‘Empa’ published an article titled ‘The Eco-balance of Li-ion rechargeable batteries for electric cars dated 27th August 2010’. According to the article, “the investigation shows that if the power used to charge the battery is not derived from purely hydroelectric sources, then it is primarily the operation of the electric car, which has an environmental impact, exactly as is the case with conventionally fuelled automobiles. The size of the environmental footprint depends on which sources of power are used to ‘fuel’ the e-mobile”.

Empa used the average CO2 emissions for the European electricity mix of 0.562kg/kWh. This mix consists of 31.6% nuclear, 12.7% hydro, 51.1% fossil fuels, 3.1% new renewable (solar, wind etc.) and 1.4% waste power. So far so good as we now have a method to calculate emissions associated with electric vehicles. But the European generation mix is very different than the Australian mix (see table 2).

Department of Climate Change estimates Kg CO2-e/kWh. Information source Table 39 in National Greenhouse Accounts (NGA) Factors – November 2008 at http://www.climatechange.gov.au/workbook/index.html

When the Australian averages are worked into the Empa calculation the results are somewhat less encouraging (see table 3). The indications are that unless you operate in the Northern Territory or Tasmania, under current power generation mix conditions, a move to EVs will give the opposite outcome. Instead of reducing the environmental footprint of your fl eet you will most likely increase it instead.

When this matter of increased emissions from going all electric is raised the usual response is that EVs would use the so named ‘green energy’ derived from renewable sources. However, it appears that alternate electricity generation sources come at a cost premium, perhaps three times the cost of conventional generation in the case of wind power.

In addition, there is a price premium associated with the purchase of EVs which can be in the region of $10,000 over a conventionally fuelled vehicle of simular size. Using seven litres per 100 kilometres fuel use, the conventionally fuelled vehicle would be able to use an additional 95,000 kilometres worth of fuel before that $10,000 premium is equalised.

Should the vehicle be subject to Fringe Benefit Tax (FBT), now set at a flat 20% of the vehicle purchase price, then paying twice as much for an EV over the  conventional vehicle will double your FBT bill. At $40,000 the FBT bill for this vehicle will be around $8,000 per year. It just doesn’t seem a sensible business choice. The future introduction of a carbon tax will also add an additional level of complexity and, mostly likely, will increase the cost of electricity.

The greatest concern for the fleet manager is the vehicle’s ‘whole of live cost’. That is, how much in total do I have to pay for holding this vehicle over a period of time. The biggest single influence on this equation is the vehicles residual value – what is the difference between what is it worth on disposal and the original purchase price. Being new to the market the residual value of EVs is an unknown and a couple of thousand dollars less at resale could severely negatively impact the ‘whole of life’ cost equation.

This is not to say that EVs are not a viable alternative, they can be. What is needed is an abundance of clean and cheap electricity and purchase pricing that is close to current equivalent sized models. Currently, we have none of these.

Recent media reports inform us that electricity prices are rising by double digits on a yearly basis. Also in the forefront of our mind is a reported electric supply crisis set to be seen over the coming five years across different states.

We do not know how much of these reports are fact or merely speculation. What is clear is that there are many question marks for the adoption of EVs. In looking at the data, a number of conclusions start to emerge.

It is clear that until power generation emissions are substantially reduced then EVs will not deliver the desired CO2 emissions reduction. In addition at current suggested manufacturers recommended retail prices they certainly do not represent value for money.

Emissions can, and should be addressed by both government and private industry for no other reason that we can make a positive contribution and there are a variety of ways that this can be achieved.

One of government’s roles is to encourage the implementation of industry best practice. The introduction of legislation such as the adoption of Euro 5 and 6 Emissions Standards, setting a maximum emission per kilometre standard (currently scheduled for 2015), specifying lower emission levels (also scheduled for a 2015 introductionbut will be a voluntary scheme as well as at a level higher than all overseas markets), and addressing the quality of fuels are all issues that governments can and should urgently address.

However, there seems to be reluctance by government to show a lead in these areas. Not too long ago AfMA was asked for its view on the adoption of Euro 5 and 6 emissions standards. Government suggested a number of implementation strategies. The most expedient option was introduction of euro 5 on a two year timetable, bearing in mind that Europe is already on euro 5 and has been for several years. In our submission we supported the two year implementation strategy. Shortly
after submitting our views we learned that government had delayed implementation of euro 5 for at least a further two years.

So what can the fleet manager do?

For their part fleet managers can employ ‘fit for purpose’ analysis to ensure that they are using vehicles which have the lowest possible emissions for a particular task. Performing a comprehensive ‘whole of life’ costing analysis will ensure the best value for money in choosing lower emission producing vehicles. There are a range of alternative fuels available which may lower overall emissions. Journey planning analysis can also assist in lowering overall emissions by ensuring that vehicles are following the most efficient route. Even seemingly small changes such as implementing a ‘no idling’ policy can significantly reduce emissions. As an added bonus, reducing emissions by increasing efficiency and lowering fuel use will also positively affect the organisation’s bottom line.

Whether your goal is to stop global warming or to improve air quality there are a wide range of solutions available and none should be considered in isolation.

AfMA is a not for profit association for Fleet Management Professionals with some 575 Members from all levels of government and the private sector who manage collectively approximately 800,000 vehicles.

Fleets play an important role in the Australian economy. An estimated 75% of locally produced passenger vehicles are purchased by business fleets and in excess of 50% of all yearly new vehicle registrations are taken up by fleets.